The mouse gets it

Back in January we reported that a trade mark application by esure Insurance Limited to register the shape and appearance of a computer mouse on wheels as a trade mark was successfully opposed by its competitor Direct Line Insurance Plc based on its earlier trade mark, consisting of a telephone on wheels. Direct Line’s opposition to eSure’s application to register the 3D computer mouse on wheels as a trade mark, for insurance and financial services, was upheld in the High Court. Jessica Stretch tells us what all the squeaking is about

Topic: Brands

Who: Direct Line Insurance plc v esure Insurance Ltd

Where: High Court

When: 29 June 2007

Law stated as at: 31 July 2007

What happened:

The High Court has upheld a Trade Mark Registry decision which allowed an opposition by Direct Line Insurance Plc ("Direct Line") to a trade mark application by esure Insurance Limited ("esure") to register the shape and appearance of a computer mouse on wheels. However the judge did find material errors of principle in the hearing officer's decision as detailed below.

Marketing Law reported the Trade Mark Registry decision earlier this year. In September 2004, esure applied to register a three dimensional mark of a computer mouse with eyes and wheels in respect of insurance and financial services in class 36. In December 2006, an opposition by Direct Line succeeded on the basis of its well-known trade mark comprising a telephone with wheels and also registered for insurance and financial services in class 36.

esure appealed to the High Court on the basis that the hearing officer had made a number of errors in the application of sections 5(2)(b) and 5(3) of the Trade Marks Act 1994 (the "Act").

Section 5(2)(b) of the Act provides that where a trade mark is similar to an earlier trade mark and is to be registered in respect of similar or identical goods, it shall not be registered where a likelihood of confusion exists.

Lindsay J allowed esure's appeal under this section of the Act. He ruled that the hearing officer was incorrect in stating that there was no minimum threshold as to similarity. Lindsay J held that there was a low threshold, established by considering the overall impression of the two marks. After considering the overall impression of both marks, he held that as a matter of first impression, Direct Line had overcome the threshold.

Lindsay J went on to rule that the hearing officer had erred in concluding that an average consumer might have been confused into thinking esure's mark was economically linked to Direct Line on the basis that there was no supporting evidence. Given that the marks were visually and aurally different, Lindsay J concluded that the companies were likely to be perceived as competitors rather than linked undertakings.

Section 5(3) of the Act prevents registration of a mark of that is identical with or similar to an earlier trade mark and that earlier trade mark has a reputation in the UK and use of the later mark would take unfair advantage of, or be detrimental to, the reputation of the earlier mark. Lindsay J held that the hearing officer had not erred in deciding that use of esure's mark would be detrimental to the distinctive character of Direct Line's mark.

Why this matters:

This case highlights that, although it may be fairly easy to overcome the threshold of similarity based on first impression, the onus is on the trade mark owner to show that there is a consequent likelihood of confusion in the minds of consumers. As the judge did not find an error of principle in the hearing officer's decision under section 5(3) of the Act, he was constrained by the hearing officer's decision which illustrates the limits of an appeal.